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Capital controls lower the variability of the exchange rate and reduce the risk premium as well as the domestic interest rate. On the other hand, capital controls reduce the number of noise traders and, therefore, the risk-bearing capacity of the market, leading to higher interest rates and a...
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controls. And (c), we find that a tightening of capital controls increases the unconditional volatility of the exchange rate …, but makes this volatility less sensitive to external shocks …
Persistent link: https://www.econbiz.de/10013210580
, such capital controls have the merit of reducing the volatility of exchange rates following a monetary shock. On the other … hand, the implementation increases exchange rate volatility in the short run and induces costs for the real sector in the …
Persistent link: https://www.econbiz.de/10013317786
controls. And (c), we find that a tightening of capital controls increases the unconditional volatility of the exchange rate …, but makes this volatility less sensitive to external shocks …
Persistent link: https://www.econbiz.de/10012467245
, such capital controls have the merit of reducing the volatility of exchange rates following a monetary shock. On the other … hand, the implementation increases exchange rate volatility in the short run and induces costs for the real sector in the …
Persistent link: https://www.econbiz.de/10014122083
Persistent link: https://www.econbiz.de/10000876552
that the volatility of exchange rates has declined after the imposition of the URR while the volatility of capital flows …
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